Totally Brain Dead
By now you’ve read the quote by Jimmy Carter’s National Security Advisor, Zbigniew Brzeszynski, speaking to my former Congresscritter, Joe Scarborough:
“You know, you have such a stunningly superficial knowledge of what went on that it’s almost embarrassing to listen to you.”
Well, that’s pretty much how I feel listening to politicians talking about various tax cutting schemes to deal with the economic problems.
Excuse me, but people without jobs don’t pay taxes, and there are hundreds of thousands of people becoming unemployed every month. Those with jobs are not going to start spending, they are reducing all of their expenses and paying down debts in anticipation of becoming unemployed. Taxes are totally, absolutely, unequivocally irrelevant in the current situation.
Pay attention! The Fed rate is for all intents and purposes “0%”. The only step left is to pay people to borrow money. The rate is irrelevant because the people Congress gave hundreds of billions of US taxpayers’ money to aren’t willing to lend it. Saying the rate on a thirty-year fixed mortgage is 4%, only has real meaning if someone is willing to loan the money. It’s like those “while supplies last” special sales on Black Friday – if there is no more supply, the stated price is meaningless.
This is not “an economic downturn”, it is an all out, hard core, not seen for about 80 years, world-wide recession, that could easily become the new “Great Depression” if governments screw this up.
We know what worked the last time, so we should be doing it. Massive government programs that get people employed and spending again. No more of this brain dead sniveling about the “free market” and the “private sector” – for those who missed it: those are the morons that got us into this mess. If they knew what in hell they were doing, we wouldn’t be living with this disaster. The criminal conspiracy that the GOP has become gave them tax cuts and trillion dollar bail-outs and the economy is headed down the drain.
7 comments
People without homes (due to foreclosure, etc.) have trouble having or finding jobs, too.
Great post, Bryan. These people make me sick.
So how do we make them change??? This scares the crap out of me.
All we can do is keep hammering on Congress on the new administration. My representation is pretty worthless, but I let them know what I think. We can hope that people with power will start listening to those, like Roubini and Krugman, who have been right about what was going to happen, and stop listening to those who missed the problem altogether.
People don’t need tax cuts, they need jobs so they can start paying taxes again.
And, Jill, the HOLC worked the last time, and it will work this time, if the powers that be get to work and stop putzing around.
It’s already screwed up and this is a Depression… you won’t hear that word used until years later, but that’s what this is.
You can’t borrow your way out of a depression. Isn’t that how we got into this mess in the first place? Borrowing? Promoting more consumer spending is just stupid. Bailing out failed banks and industries isn’t going to help either. It’s only going to prolong the agony. They can’t prop up housing prices either. Once prices drop people will buy. Values are going to go where they will regardless of how low interest rates fall.
If the government is going to toss billions around they need to put it where it will do some good. Jobs, jobs and more jobs. People need good jobs to feel secure enough to spend. Maybe the government should provide some venture capital… invest in companies with new technologies and growth possibilities; ie some of the many alternative energies. Take a minor position and let them grow. Sell their shares later for a profit. We all win. It can’t be worse than what they are doing now propping up the failures. Another thing they can do is pass a universal healthcare plan (hahahaha, I’m dreaming). That would remove the burden of healthcare from businesses and allow them more capital for investment.
One of the reasons I’m slowing spending is my distrust of the government and my fears they will mess it up further. So it’s best to have some extra cash. And of course fear of unemployment. My company is for sale. And we all know how that often works out.
It is totally frustrating how many “experts” don’t understand how the economy works in real life. The process is simple and known by anyone who has ever started a business.
Consumers need a source of income before they can buy. That source is a job. The more jobs, the more demand. Government is the only entity that can get the process working, whether it was free land for homesteading early in history, or public works later – government is the primal source of capital.
This “jobless recovery” after Bush’s first recession combined with the housing bubble made what is happening now inevitable. There is no free lunch. When all of the profits are pulled out instead of reinvested, stasis is guaranteed, and stasis is death.
Ah ha! You have it. We’ll have an unemployment tax!
Okay, enough of that. I think the same can be said for tax breaks, since the unemployed aren’t getting taxed. Though I haven’t thoroughly baked this idea through.
I like the idea of the current bush admin tax cuts expiring, though.
It’s looking more and more like the government of Louis XVI. It has profit potential for Gillette if they move into the field.
The people covered by the Bush tax cuts are the only people left with the money to pay taxes. They are the only people who profited from this mess, so they should pay to clean it up. I’m heartily sick of cleaning up after them.